Joe Karaganis, from the Social Science Research Council was kind enough to reach out to me last week and send me an advance copy of the (somewhat epic) report that SSRC just released this week, exploring "Media Piracy in Emerging Economies." It's a rather massive 440 pages of research into a variety of issues having to do with infringement, specifically focused on emerging markets. While it was nice of Karaganis to send it to me, I was a bit disappointed to find out that they're not releasing the report for free (for most). Instead, it's released under a "Consumer's Dilemma" license, where they want people in developed countries to pay $8 for the report, but will offer it for free to those in less developed countries (though, it looks like Canadians can get it for free). Though, to their credit, at the end of the license info, they do note:

For those who must have it for free anyway, you probably know where to look.

Unfortunately, that's right under the warning that "non-compliance" with the license in the US could subject you to five years in prison and $250,000 in fines. That's an unfortunate exaggeration, as most non-compliance wouldn't result in criminal copyright infringement. For a report on the subject that seems so insightful in many points, it's disappointing that this report chose to reinforce this type of thinking. Update: Clearly, I missed that this is pure satire by the report's authors. Such is life when I'm so used to seeing such things that are real.

That said, much in the report is extremely forward-looking and thinking. It goes into great detail how fascinating and innovative new business models are appearing around the globe where "piracy" is rampant, and suggests that we really need to rethink the idea of "piracy" in those markets. It highlights how almost all of the policy discussions in the west concerning infringement focuses on "enforcement," but that may be the wrong way to go about it. The research, instead, points out that a better focus may be on setting up the structures for successful business models to emerge -- which include local firms who can compete on price:

Invariably, industry groups invoke similar arguments on behalf of stronger enforcement: lower piracy will lead to greater investment in legal markets, and greater investment will lead to economic growth, jobs, innovation, and expanded access. This is the logic that has made intellectual property a central subject of trade negotiations since the 1980s. But while we see this mechanism operating in some contexts in emerging markets, we think that other forces play a far larger role.

The factor common to successful low-cost models, our work suggests, is neither strong enforcement against pirates nor the creative use of digital distribution, but rather the presence of firms that actively compete on price and services for local customers. Such competition is endemic in some media sectors in the United States and Europe, where digital distribution is reshaping media access around lower price points. It is widespread in India, where large domestic film and music industries dominate the national market, set prices to attract mass audiences, and in some cases compete directly with pirate distribution. And it is a small but persistent factor in the business software sector, where open-source software alternatives (and increasingly, Google and other free online services) limit the market power of commercial vendors.

It also points out that focusing just on enforcement is a key mistake by western nations, when they might be much better served in enabling these markets to emerge to "compete" with infringement:

The centrality of pricing problems to this dynamic is obvious, yet strikingly absent from policy discussions. When it comes to piracy, the boundaries of domestic and international policy conversation are exceedingly narrow. The structure of the licit media economy is almost never discussed. Instead, policy conversations focus on enforcement--on strengthening police powers, streamlining judicial procedures, increasing criminal penalties, and extending surveillance and punitive measures to the Internet. Although new thinking is visible in many corners of the media sector, as companies adapt to the realities of the digital media environment, it is hard to see much impact of these developments on IP policy--and most particularly on US trade policy, which has been the main channel for the international dialogue on enforcement.

In our view, this narrowness is increasingly counterproductive for all parties, from developing-country governments, to consumers, to the copyright interests that drive the global enforcement debate. The failure to ask broader questions about the structural determinants of piracy and the larger purposes of enforcement imposes intellectual, policy, and ultimately social costs. These are particularly high, we would argue, in the context of ambitious new proposals for national and international enforcement--notably ACTA, the Anti-Counterfeiting Trade Agreement recently finalized by the United States, the European Commission, and a handful of other countries.

To be more concrete about these limitations, we have seen little evidence--and indeed few claims--that enforcement efforts to date have had any impact whatsoever on the overall supply of pirated goods. Our work suggests, rather, that piracy has grown dramatically by most measures in the past decade, driven by the exogenous factors described above--high media prices, low local incomes, technological diffusion, and fast-changing consumer and cultural practices.

That last paragraph is a key point that our current policy makers seem to miss entirely. On top of that, the report notes that nowhere in the discussions about enforcement is any discussion found of connecting enforcement to figuring out "how to foster rich, accessible, legal cultural markets in developing countries." Of course, that's because most policy makers don't care about that.

The report kicks off with a piece by Karaganis on the importance of "rethinking piracy." It notes that the industry claims on "piracy" are not exactly credible or trustworthy -- and not very productive towards coming up with solutions, since all they've done is "undermined confidence in the industry research enterprise." In fact, it goes through a rather complete debunking of the overall industry claims, suggesting that they're somewhat meaningless -- and then points out that all of these reports that count "ripple effects" seem to ignore the ripple effects in the other direction: the kind that benefit consumers, especially in developed nations:

But in extrapolating losses beyond the affected industries, these studies also introduce new problems. Fundamentally, they all misrepresent the relationship between piracy, national economies, and international trade. Consistently, none of them model the other side of the transaction--the consumer surplus--in describing overall economic impact. Two basic accounting problems have become emblematic of this approach.

First, domestic piracy may well impose losses on specific industrial sectors, but these are not losses to the larger national economy. Within a given country, the piracy of domestic goods is a transfer of income, not a loss. Money saved by consumers or businesses on CDs, DVDs, or software will not disappear but rather be spent on other things--housing, food, other entertainment, other business expenses, and so on. These expenditures, in turn, will generate tax revenue, new jobs, infrastructural investments, and the range of other goods that are typically cited in the loss column of industry analyses.

The report is chock full of other insightful points, such as noting that, "Predictably, raids scale more easily than due process." Later it goes through the various "education campaigns" that industry and governments have invested in, noting that they appear to have done "very little" to actually slow down the rate of piracy:

Our inquiries (mixing survey, focus group, and interview methods) found a remarkably consistent cluster of attitudes on piracy: (1) that it is often regarded with ambivalence by consumers, (2) that pragmatic issues of price and availability nearly always win out over moral considerations, and (3) that consumers know what they are buying. The classic scene of developing-world piracy--the kiosk or street vendor selling DVDs--produces very little misunderstanding on the part of consumers about the nature of the transaction. Consumers weigh tradeoffs between price and expectations of quality, but within a context of explicit black-market negotiation in which notions of fraud or deception—often borrowed from anti-counterfeiting discourse—generally don’t apply. The price gap between licit and pirated media provides a clear signal of the origins of goods.

On top of that, the report responds to the regular claims by the IFPI and others that piracy is linked to organized crime and terrorism, by noting that they could find "no evidence" of any such connection. Similarly, it mocks policy makers who conflate counterfeiting with media piracy.

And that's all just in the first chapter! From there it first looks at the ongoing effort -- mainly driven by the US and the USTR -- to "harmonize" enforcement efforts, followed by a country-by-country look at the state of "piracy" in various developing nations, highlighting many of these issues in a more localized fashion. The whole report is really fascinating, and an incredibly useful read for policy makers who are so focused on things like ACTA, enforcement and industry claims of "losses." It really is a huge contribution to the research on these topics -- and something that I hope gets delivered to policy makers. I'd send copies to various politicians myself... if it weren't for that license that tells me I could face five years in jail for doing so. So, as a final note, I'll just suggest that Karaganis and the others behind this really excellent research report reconsider their license choice on the document (see update above), and instead encourage sharing of the document -- and maybe take a page from what they're seeing themselves in setting up creative new business models to cover any costs.

I've pointed out time and time again that I don't, in any way, condone unauthorized file sharing. I don't participate in it, and I don't think people should do so, though I certainly understand why many do. Instead, I talk about recognizing two things. First, such unauthorized downloading is here and it's happening and there's little likelihood that it's going away, so your best bet is to figure out how to deal with it, rather than just bitch about it. Second, once you come to realize that, you can often come up with much smarter, better, more effective and more profitable ways to make money by embracing what your fans want. And, yet, I'm still told that I'm "the world's biggest piracy defender" who "only wants to rip off musicians." And, recently, I was told that it was particularly pernicious of me to suggest that content creators recognize that piracy isn't going away.

However, it looks like even more data is supporting that position. TorrentFreak points us to a new study coming out of Denmark -- where the entertainment industry has been extra aggressive in trying to "crack down" on unauthorized file sharing and to "educate" the public on why such activities are wrong. And, yet, the study shows that 70% of people still find unauthorized downloading to be socially acceptable in some form or another. 15 to 20% say that it's totally acceptable, with the rest saying that it's acceptable within certain boundaries. Where people begin to think it's not acceptable is when it involves downloading the works of others and then selling them. This isn't all that surprising, and fits with what we've seen elsewhere, but it's still interesting to see the numbers.

What's also interesting is that these numbers are almost identical to what a similar study found over a decade ago. In other words, despite tons of money, lawsuits, lobbying, education campaigns, advertising, threats, news reports and the like -- all telling people that unauthorized downloading was unquestionably morally wrong -- it's had almost no impact on people's attitude towards the practice, and the vast majority find it socially acceptable. That certainly suggests that my position has a pretty strong basis in fact. Historically, it's very, very difficult to convince people that something they feel is socially acceptable is morally evil. And that's likely to be true in this arena as well. So why does the industry keep insisting that they can change that basic fact?

Update: Good discussion in the comments digging into the details of the study. It becomes clear that there are very different levels of what the folks surveyed believe is socially acceptable. What it suggests is that only 30% say that unauthorized sharing is always unacceptable, while the remaining 70% is across the spectrum in terms of how socially acceptable it may be and under what circumstances. I don't think that changes the overall point -- but it is good context for the discussion.

Slashdot points us to an article at the "International Business Times," that reports on a study from the AIM Group which claims that Craigslist is 'a cesspool of crime.' Interesting claim. What seems to be totally missing from the IBTimes report is the fact that AIM Group works for Craigslist competitors and, in this case, the "research" was funded by Craigslist wannabe-Oodle. That's not mentioned in the IBTimes report at all. In fact, the only mention of Oodle in the article is a quote by the CEO of Oodle mocking Craigslis and playing up Oodle... but never mentioning that he paid for the research in question.

As for the actual "research," it seems laughable, at best, and should immediately raise questions about any AIM Group research. The "research" basically scoured news reports and found a grand total of 330 "crimes" in the past year that have some sort of loose connection to Craigslist. I have a hard time seeing how that makes it a "cesspool" of crime. That's a very small number, especially considering the hundreds of millions of posts and transactions that take place via Craigslist. This seems like a massive cheap shot by both Oodle and AIM Group, and it's sad that a reporter would repeat the claims without noting the obvious problems with it. That's not journalism. That's being a PR service.

Meanwhile, looking at the "details" from AIM Group make the results even less compelling. They play up that 12 murders had a loose connection to Craigslist, but a bunch of those appear to be from one deranged individual. It seems pretty ridiculous to blame Craigslist for that.

Every year, on the eve of the Midem music industry event in France, the IFPI puts out its report about how "piracy" is destroying the music industry. It's well-timed, because it then gets quoted repeatedly in Midem discussions, and gets lots of press and stuff. This year, is no different, though amusingly, the IFPI tries to pre-empt the usual criticism by insisting the troubles facing the recording industry have nothing to do with its unwillingness to try new business models. It's also wrong. Blatantly, incredibly, wrong. As has been detailed by many, many, many other studies, the only part of the industry that's really been suffering is the recording industry. Of course, the key point -- which is the same as it is every year -- is the IFPI begging the government to come save its business by blocking competition, criminalizing technology, and making everyone else responsible for propping up the record labels. Sorry, but the world doesn't work that way. Not surprisingly, the IFPI's report is also filled with all sorts of factual errors, such as relying on the debunked report whose methodology was so bad that it thought that only a few 2010 movies were the most downloaded of 2010, with much older movies dominating the list.

The real problem with the report -- beyond the flat-out errors -- is the fact that it's so focused on music sales and music sales alone as the be-all, end-all of the music industry that it simply ignores everything else:

Fewer new artists are breaking through globally. Total sales by debut artists in the global top 50 album chart in 2010 were just one quarter of the level they achieved in 2003

Traditionally vibrant music local industries, such as Spain and Mexico, are especially hard hit. In Spain, where music sales fell by an estimated 22 per cent in 2010, no new home-grown artist featured in the country's top 50 album chart, compared with 10 in 2003

Note the implicit assumption here. Because there are fewer music sales, it means that such new music is not being created, or those artists are not successful. This is like saying that "because fewer horse carriages were sold this year, it shows the automobile is not a legitimate savior of the transportation industry." You see how that's done? If you define success based on the obsolete way of doing things, of course it's going to look bad. But if you look at the actual numbers, and the actual opportunities, you realize that the market is actually growing.

IFPI boss Frances Moore apparently claimed that this is "a crisis affecting not just an industry - but artists, musicians, jobs, consumers, and the wider creative sector." Except that's not true. There are more people making music today than ever before. It's cheaper than ever before to make, distribute and promote music. If you're a musician, there are more ways than ever before to build a fanbase and to build a business model to make a living. It's a great time to be a musician. It's also a fantastic time to be a consumer. It's hard to see how Moore can make such a claim that is obviously false, and no one calls her on the obviously false nature of her claims. When Moore took over last year for John Kennedy, I had hoped that maybe she'd bring some sense to the IFPI. Instead, she seems to be spreading the same propaganda as her predecessor.

A bunch of folks have sent in this recent O'Reilly Radar interview with Brian O'Leary, concerning the data on the impact of ebook "piracy," with many pointing to the following quote:

Data that we collected for the titles O'Reilly put out showed a net lift in sales for books that had been pirated. So, it actually spurred, not hurt, sales.

Of course, if you read the details, he's actually saying this is from a study from a couple years ago, and the focus of his point is that there really isn't enough data to say yet. He's hoping that other publishers will work with him to do more research on this subject, but so far, they haven't.

O'Leary, correctly, points out that there are lot of factors involved and it would be nice to have more data to look at the actual impact. But what really struck me is that line about how publishers simply aren't willing to collect the data and study the actual impact of unauthorized copies. I'm trying to figure out why this is. There are so many copyright holders who whine and complain about the impact of unauthorized copies, that you would think they would be all over the idea of working with some researchers to figure out the actual impact (good or bad), so that they can respond accordingly. That they refuse to do so seems oddly telling. It's as if they don't want to know. I can only speculate as to why, but as a guess, I would imagine that some firms are afraid of finding out that the impact isn't as bad as they think (or, as O'Reilly discovered, that it's positive on sales, rather than negative), and suddenly they've lost their "bogeyman" that they've been able to blame poor sales on.

Last year, we pointed out that Steven Tepp, who worked at the US Copyright Office at the time, and was heavily involved in pushing for ACTA (and downplaying the legitimate concerns of ACTA critics), jumped ship to the private US Chamber of Commerce, which has been one of the stronger supporters of such bad laws. The Chamber of Commerce, which is basically a lobbying organization for some of the world's biggest businesses, has a history of making up absolutely ridiculous claims about intellectual property, so it's really not a surprise that it would hire Tepp, who did the same thing from within the government.

However, when Tepp speaks out in support of greater protectionism, especially based on a complete lack of evidence, shouldn't the press point out that he was heavily involved in the crafting of some of the legislation he's now supporting from the "outside"? For example, Hillicon Valley has an article about a silly new study from MarkMonitor, which notes the unsurprising fact that, gosh darnit, there are a lot of sites out there that offer infringing products. Big shock. But the article then quotes Tepp saying:

"Online counterfeiting and piracy is a destructive force that threatens consumers, hurts our businesses, and costs American jobs."

That's a sort of go to line that we hear all the time. Funny thing is, no one supports it with any actual evidence. It's purely faith-based. What's the neat trick that Tepp pulls is he says this in commenting on a report that sounds like it's presenting evidence to back up his claims. It is not. The report says that there are lots of sites out there offering pirated or counterfeit content. That's different than proving that those sites are "destructive" or harm consumers or businesses. In fact, over and over again, when you have independent research that looks at those actual questions, you discover that the actual impact of such activities is significantly less than industry lobbyists would have you believe.

So rather than just letting someone like Tepp, who is inherently biased, comment on a report that does not make the claims he says it makes, why not speak to folks who might question some of the claims from the report... or at least note that Tepp is hardly an impartial observer here, but someone who is paid to pretend that the impact of copyright and trademark infringement is significantly worse than any of the evidence actually suggests?

As for the actual report that Tepp was commenting on, it doesn't actually say what Tepp says it says. You can read the details of the report (pdf) here. It's almost laughably weak in its methodology. Nowhere does it support any of Tepp's claims -- and you would think that a journalist wouldn't quote a biased commenter making claims that have nothing to do with the report in question. Specifically, the MarkMonitor report simply looked at some sites that are used for infringement, then assumed that they were used entirely for infringing purposes, and then used Alexa ratings (perhaps the least credible measuring system out there) and simply added up all visits, and seemed to suggest that this was all for infringement. When it came to pharmaceuticals, the researchers did not appear to make much of an attempt to determine which offerings were really gray market importers of generic drugs, as opposed to counterfeits. Instead, it just made some assumptions based on the sites themselves.

So basically, all the report actually shows is that, according to Alexa (again, not considered to be even remotely accurate), some sites that may have some infringing downloads or may sell some unauthorized products get a lot of traffic. Like that's a surprise. And yet, that leads to a quote from a biased ex-government official, now paid to hype up the "threat" of infringement, as if this study proves we need the new laws he was a part of writing? How is that responsible journalism?

Nate Silver, who, before he became famous as a political data analyzer on his FiveThirtyEight website (now hosted by the NY Times), was famous to a much smaller group of folks for his similar data analysis of baseball data at Baseball Prospectus. Every so often, he jumps back to baseball analysis, such as with his recent effort to question some of the common wisdom concerning the Baseball Hall of Fame. There's a common complaint among fans and some in the press that the Hall of Fame has become "watered down" in some way, and that they're letting in players who really shouldn't qualify. The comment that is repeated way too frequently is "It's the Hall of Fame, not the Hall of Very Good." However, Silver breaks down the actual data, and notes that percentage-wise significantly fewer players are getting into the Hall of Fame today than in the past. He shows the following chart to help prove the point: As he notes, the point is not to say that one period is correct, and the other is not, but simply to challenge the suggestion that admission to the Hall of Fame has become much easier today. And, yes, he also discusses some of the obvious counterpoints -- such as the fact that, thanks to expansion, there are now more players -- and why there are other equalizing forces (the internationalization of the game, for example).

It's an interesting article if you're interested in that kind of thing. But, what's most entertaining is that a large number of the comments on the story seem to simply refuse to accept what the data says. They don't refute the data. They don't suggest explanations that would explain the data. They flat-out ignore it and insist that the Hall of Fame has been watered down these days. I noticed this thanks to King Kaufman who aggregated some of the sillier comments. Here are a few:

• "Too stringent"? Au contraire. Over the last couple of decades they have admitted so many bums that it defies description. If anything, the standards should be tightened. There are perhaps six active players who should EVER be considered.
• We've dumbed down America and now you want to water down what makes a true athlete great. They should measure up or not be considered!!!! That's the problem with America continually relaxing standards and codes.!!!!
• The statistical look at the question is entirely misdirected. There have been a handful of standout players in the game, something less than 50 in total.
• i thought the hall was for extraordinary accomplishments not just very good ...the hall is so diluted these days.

There are probably some decent explanations for these kinds of mass delusions. I would guess that people who either never actually saw some of the Hall of Fame players from an earlier generation, or saw them so long ago and are overcome with nostalgia, are dealing with a bit of confirmation bias -- where they only remember (or know about) the highlights, and ignore the rest. With more recent players, they've probably seen them a lot more, or remember things a lot more clearly, and thus the "great" feats are diluted in their heads by the fact that they weren't preternaturally good (but, no one is).

That said, we often see this sort of thing around here. I've presented numerous studies concerning certain areas of interest, and almost immediately we get comments that don't try to rebut the data, or point to errors in the studies (and there may very well be errors or confounding factors), but to simply insist that what they've always believed simply must be true. It seems like a form of cognitive dissonance on display in ways that are both troubling and amusing. It's the basis of what I call "faith-based" decision making, where actual data is simply ignored for what "must be" true.

Over the summer, we had pointed out how disappointing it was that the press relied on an obviously bogus research report from the University of Ballarat's Internet Commerce Security Laboratory, about how much infringing content was being shared on BitTorrent. As we noted at the time, the folks over at TorrentFreak carefully picked apart the study and showed how it appeared to have been done by folks who didn't actually understand how BitTorrent and torrent trackers worked. Apparently, the TorrentFreak guys sent a note to the authors offering to help them fix the problems in their study methodology, and all they got back was a sarcastic email from one of the researchers saying that he'd gladly send the Torrentfreak guys a complimentary copy of O'Reilly's Statistics in a Nutshell, as it "might give further insight into statistical methodology." Snarky!

Apparently, the researchers didn't do much to fix their methodology, as they're out with another report, which -- yet again -- the press appears to be quoting without question, even with some serious red flags -- such as listing only four movies from 2010 as being among the most downloaded in 2010. Once again, TorrentFreak comes to the rescue and details the flaws in the study's methodology. Of course, seeing as the report was funded in part by a movie studio and IBM, perhaps the researchers aren't so concerned about getting it right as they are about getting what the funders' wanted.

With all the stories of people who don't want to be groped or seen naked just to travel by airplane these days, the TSA must be thrilled with a new poll that was put out by CBS that's getting lots of press claiming that 81% of Americans support such full-body scans. Thus we get titles about how Americans "overwhelmingly" are in favor of such scans.

Of course, as with any poll, the devil is in the details, and specifically in how the questions are asked. As Tim Lee properly notes, the poll question does not mention the whole naked bit or anything relaying the concerns of those protesting the machines. The actual question asked read as follows:

Some airports are now using "full-body" digital x-ray machines to electronically screen passengers in airport security lines. Do you think these new x-ray machines should or should not be used at airports?

Note that there's nothing about how someone will see you naked. Note that there's nothing about the health concerns some have raised (which, frankly, are probably blown out of proportion). Note that there's nothing about the compulsory genital groping should you refuse to be seen naked. Most people don't follow these issues, and without knowing the details, when you present the question as it's been presented in this poll, it should come as little surprise that most people agreed. Try asking the same people whether or not they approve of being scanned by a machine that presents TSA screeners a naked image of their body, and see what the results would be then.

Not quite sure what to make of this one, but some new research is suggesting that electrical current applied to your head in a certain manner can improve math skills for up to 6 months. The study also found that changing the flow of the current can actually harm math skills in a similar manner. It sounds like the research is still pretty early, but various researchers are apparently getting pretty excited about being able to "stimulate" brain activity in various ways with electrical currents. Does this mean that we're now going to start reading about electrical "doping" scandals at the next mathletes contests?